Skip to main content

About this Show

FOX Business After the Bell

News/Business. Stock market updates. New.

NETWORK

DURATION
01:01:00

RATING

SCANNED IN
San Francisco, CA, USA

SOURCE
Comcast Cable

TUNER
Channel v761

VIDEO CODEC
mpeg2video

AUDIO CODEC
ac3

PIXEL WIDTH
1280

PIXEL HEIGHT
720

TOPIC FREQUENCY

Detroit 13, U.s. 9, Liz 7, Spiriva 6, Us 5, Ackman 5, L.a. 4, Ashley 3, Yellen 3, Copd 3, Tesla 3, S&p 3, Lincoln Ellis 3, Ullman 3, China 3, New York 3, Scottrade 2, David Lutz 2, Cialis 2, Ben Bernanke 2,
Borrow a DVD
of this show
  FOX Business    FOX Business After the Bell    News/Business. Stock  
   market updates. New.  

    August 12, 2013
    4:00 - 5:01pm EDT  

4:00pm
remember andreessen, he said future is 3-d printing. you will go to the store. print whatever you want. [closing bell ringing] liz: you've been all over the ups store. you will look at that partnership. the bells clang on wall street, we have half green, half red as we look to see how stocks are finishing up. dow jones industrials, things are still settling. can't quite make a go of it. just a minute ago we were straddling the flat line. in and out of green. you see the nasdaq, and russell 2,000 moving slightly higher. and you percentage. >> let's look at top headlines. less than 30 minutes, space ex-billionaire elon musk set to reveal the blueprint for futuristic travel. it could move you from l.a. to san francisco in half an hour. liz: new york to l.a. in 45 minutes? we'll see. shares of professional
4:01pm
networking giant linkedin getting quite a boost after the stock was upgraded by needham and company. they upgraded from a hold to a buy. needham said because linkedin, has quote, unexploited growth opportunity. ashley: fruit and vegetable producer dole foods has agreed to go private after $1.2 billion offer from chairman and ceo, david murdock. investors receive $13.15 a share. that is an increase of 1.50 doctor from murdock's offer in june. liz: wishbone salad dressing unit has been bought by pinnacle for $580 million. unilever will focus more on personal care products. ashley: reuters says the commodities regulator, cftc is stepping up its investigation into allegations by companies like coca-cola, warehousing firms pushed up aluminum prices. cftc reportedly subpoenaing a warehousing firm yet to be named. liz: piano maker, steinway the
4:02pm
target of a bidding war. it appears there may be a winner. steinway received a new proposal for takeover this one for about $477 million from an unnamed investment company that beats an earlier bid from the private equity firm kohlberg and company. after the bell starts right now ashley: let's get to today's action. we have david lutz, stiffle nicolaus managing director with the biggest risk to the market and lincoln ellis in the pits of the cme. let's start with lincoln. we crossed this flat line number today, lincoln, 56 times. no big surprise. we're in august. kind of drifting summer doldrums and so on. we may have movement tomorrow when we get july retail sales, right? >> absolutely retail sales. they are the at top of everybody's list along with the inflation data. you notice there is seesaw action in stocks and bonds both
4:03pm
came as we saw interest rates moving up a little bit earlier in the day, in materialses of price, pushing some of the yields down. then as stocks begin to selloff, you saw the inverse happen, the stocks made their comeback in the balance of the day. information how retail sales are progressing particularly as we approach the back-to-school season will be absolutely crucial to understand the health of u.s., the consumption led economy in the u.s. inflation data this week, part of that puzzle on the fed's mind. liz: we're talking domestic. david lutz, want to bring you into the conversation. one of the things you're watching happens to bank of japan, the boj. we found out there was a worse than expected outlook for gdp for japan at the moment. why does japan matter to our domestic investors right now no liz, thanks for having me. it is simple enough. if the bank of japan continues on its easing policy, that will be pumping more kwan quantity into the global stock system. that will benefit the u.s.
4:04pm
investors on two fronts. first of all on equities because qe is clearly benefited the stock market's run over the last two years. second, bond investors. because with's been going on, yields in at love japanese bond are significantly lower still than the u.s. bonds. so we have a lot of asian demand coming from the pensions and institutions for u.s. bond. so it's a twofold effect from bank of january. we'll hear what minutes have to say overnight. ashley: david, let me stick with you. what sectors are you looking at what sectors are you betting on in this somewhat uncertain environment? >> clearly the retailers will be a big focus. xrt, retail etf, lost 3% last week as we saw some profit-taking in the sector. there will be a lot of earnings going on that will be skewing these numbers going forward. i would say one of the more main sectors i'm paying attention to is probably the homebuilders. the homebuilders were the worse performing sector last week. the homebuilder etfs are down
4:05pm
20% almost in bear market from the high couple months ago. we have data coming from the july sales. more importantly we're seeing a lot of yields climb significantly in the united states stablizing and colling down in. those are tailwinds for a lost homebuilders out there. we see a lot of shorts covering in that sector. liz: i want our investor viewers to listen to what you just said because when they start to see a little bit of weakness they get scared. you're saying that is a buying opportunity. specifically when you look at homebuilders which ones should they look at? what quality should they be picking? >> i think it just matters more probably for the regionals, liz. to brothers obviously had a great bid to each and dhi and pulte had a great bid. look at basket like itb etf. would be way to go. the a lot of time it is not
4:06pm
company specific but geographical specific with regard to the housing market. liz: okay. ashley: what do you think is the biggest headwind facing the market short term? we have the budget battle looming. you have german elections if you want to push it out to september 22nd. we have the fed taper. what worries you the most? >> confluence whether or not the actual realization of a fed tapering does anything more significant than the rise in the 10-year rate north of 2.75. once you break through the 2.75 you have market structural issues. you have a whole series of relative value issues that come into play. investors should remember this stock market is not particularly cheap. even while sectors of the market have sole off whether it would be the last couple of days in the retail space or in the home building sectors, places that were very hot, one should be careful or cautious again, moving back to the retail sales numbers, looking at, whether or not the u.s. consumer continues
4:07pm
to have the health to propel a kind of market multiple that we've seen grow through the first half of this year. liz: well, i'll tell you, if viewers and investors don't learn from the fact that you're supposed to buy low, okay. so buy unloved areas. and i look at this and i say, you know, particularly, david, the miners look really weak until today. so did they miss their opportunitys? is there still a chance? >> well, i'm going to tell you, liz, there's been a tremendous amount of focus on gold finally starting to break out of its six-month downtrend over the last couple sessions and we're looking at miners specifically, particularly junior miners. the index comprised the junior miners out there, gdxj. liz: define the junior miners. these are not rio tintos of world? >> these are the littler guys. a lot of times they will
4:08pm
underperform the bigger guys in times of post-traumatic stress disorder because there could be credit risk in the factor. they might not necessarily have the balance sheet to withstand any significant selloff in gold. so they have gotten a hit a lot worse than senior miners like rio tinto. liz: david will kill you for using the word little letter. i'm hearing my mother. ashley: she is on the phone for you right now, liz. lincoln, you mentioned valuations. do you feel we're at the top end now? are there still deals to be had out there and good value, just have to dig a bit? >> well i think you have to be careful what sectors you're putting money to work. actually interesting enough we're a big fans of gdx, the top half of that mining sector the one because we think you will begin to see ccnsolidation there. and you can see that across the market in various sectors. we like utilities on a global basis. at this stage of the game, until we get more clarity both in terms of europe, whether it is
4:09pm
bouncing along the bottom or actually beginning to hit that u part of the u-shaped recovery we hope to expect in the second half of fourth four, or some more life out of the emerging economies we would be cautious. we had good gains here in the united states this year. better to be, not so greedy. liz: always. ashley: david, thank you so much for joining us. lincoln ellis. we'll be checking back with you in a few minutes to see how the s&p futures are doing. >> thanks for having me, folks. liz: the fed, the next move for them and worries about the markets getting toppy, is it time to get proactive about your portfolio? that means dumping names that could be hit by tighter monetary policy up next we'll do the homework for you. we're breaking down four dividend-paying stocks that could be at risk right now in a high interest rate environment. ashley: plus we could see a new iphone as early as september/10. could the launch be the magic
4:10pm
bullet apple needs to win back market share and investors as well. we want to hear from you. what the new iphone have to offer for you to actually go out and buy one? log on to facebook.com/afterthebell. we'll read out some of your answers later this hour. ♪ [ indistinct shouting ] [ male announcer ] time and sales data.
4:11pm
split-second stats. [ indistinct shouting ] ♪ it's so close to the options floor... [ indistinct shouting, bell dinging ] ...you'll bust your brain box. ♪ alonhinkorswim from td amerrade. ♪
4:12pm
from td amerrade. we replaced people with a machine.r, what? customers didn't like it. why do banks do it? hello? hello?! if your bank doesn't let you talk to a real person 24/7, you need an ally hello? ally bank. your money needs an ally.
4:13pm
liz: if tensions were simmering before they have now reached a boiling point between activist investor bill ackman and the board of jcpenney. the question now is whether the board will take action against one of their own and that's bill ackman. we head to adam shapiro on the floor of the new york stock exchange. >> it's a great question because ackman is one who leaked letter that got this whole controversy going. let's show you numbers first. numbers don't lie. this is what investors said about jcpenney today. they like what is happening at least for now. the stock went up 2.3%. a little higher than we were on friday. here's the problem, you have analysts like gilford securities even though ackman is largest shareholder he need to go. he put out a note, destructive force, propagate tore of unsound ideas and shouldn't be involved. what we see in the store,
4:14pm
corrective actions are improving. customers are buying on key stopping dates. key inventories is improved. stability is returning. credit ullman for that. ullman is the not doing what act man wants. it might be better that way. howard schultz, friend of ullman he sides over the weekend, if i was sitting on that board, jcpenney i would ask for bill ackman's removal val. cue homer simpson. doh. liz: ashley was in a jcpenney in connecticut. >> that is impressive. ashley: it was playing '70s muse sack. testimony everything felt steal and stuffy. go to macy's much brighter. better layout. it was huge contrast between the two. liz: haven't gotten at least music right. >> here's the deal. everyone has a jcpenney store, right? liz: right. >> what they were doing before tried to recreate themselves with ron johnson.
4:15pm
they tried discounts. my first suit was jcpenney suit. i paid 90 bucks before the price of oil drove up polyester prices. that was years ago. what will jcpenney sell that you can't get at macy's and wal-mart? people like ackman think the company can be turn around. liz: joe fresh? adam, thank you very much. ashley: s&p futures are closing. let's head back to lincoln ellis in the pits of the cme to find out what they're telling us. lincoln. >> this is not a joe fresh suit here but i will tell that you things have been meandering around the even line all day both in stocks and in bonds. that is really, liz, we talked about this last week.% meandering around the 1700 level, plus or minus 15 handles on s&p. really should be the theme for the month of august. tomorrow we get a key piece of data on retail sales. later on in the week for interest rate piece of the puzzle we get cpi and ppi inflation date.
4:16pm
they didn't have much of a range to trade around. i suppose tomorrow at 7:30, the range will be a bit bigger. ashley: fine looking suit, lincoln. liz: chicago, they know how to dress. as investors embrace for tighter fed monetary policy. we need you to be proactive about the portfolio. one thing investors need to watch are dividend-paying stocks. why is that? which stocks may be best for you not to buy or drop now if you have been lovers of them? investor place.com, jeff reed has a master list. he has four names to dump. we promise all four pay out very nice dividend but l widely-held name. you may get pushback here around people may throw tomatoes at the tv,. >> occupational hazard liz. liz: why do i need to dump my dividend-paying stocks right now. >> i'm not categorically saying
4:17pm
you shouldn't not own dividend stocks or bond there is always a mix. that was the place to be when rates were so low and markets had upside to them. we feel the market is at an inflection point. maybe it starts with a three handle sometime next year, those dividend stocks paying 2 1/2% are not as attractive. these stocks will never go away. you could underperform and your portfolio to take a hit as a result. liz: 10-year, 2.62%. i remember talking about dividend three years ago, 1.5, 1.6 for the 10-year. you are right. we see yields thinking up on treasurys. you're saying jettison now? let's get to your first one. i can't believe it. it has a 3.1% dividend. why would i get rid of the chicken nugget name? >> well, you know mcdonald's is one of these companies everybody thinks will be around forever. is like a token of national whatever, pride, capitalism. growing everywhere else in china.
4:18pm
problem with mcdonald last earnings report it missed on top and bottom line. same-store sales were off. look at details, they had both trouble in north america, europe, australia, japan and china. there wasn't going for the stock. there is lot working against mcdonald's. the stock will not go away. the dividend is nice. it's a big name. there is strong dollar environment right now which weighs on multinational earnings because of the exchange rate. face it at home, consumers aren't, eager to spend as they have been. liz: right. >> so fast-food sales are taking a hit. mcdonald's isn't healthy evident option. there are bigger risks at play. mcdonald's like to blame the weather for its sales but think there is little more. liz: you say mcdonald's. we blew your next big, we showed lower third in advance of you saying it. wal-mart you're saying at least get rid of them for now. >> last quarter same-store-sales declined first time in two
4:19pm
years. really rough time for investors in wal-mart stock. you think it is biggest retail stock out there. but that is not to say it is stable. it can still drastically underperform market. same thing, excuses about the weather. people weren't buying seasonal items or income tax didn't come in on time. if wal-mart misses again this week reports on earnings and same-store sales declines investors will be upset and i don't think the stock will have much upside for the rest of the year. liz: your next pick is widely-held during everybody's portfolio sometime during their lifeline, coca-colaca. >> warren buffett owns lots of coke. that isn't to say coke is going away. when you look at coca-cola, it's a company seen massive buildout. it is a global brand. coke numbers they continue see this headwinds against it. not just because of smaller stuff like currency because it's a multinational and the dollar is strong, first north american volume decline in sales in 13 years. why do you think that is? obesity and diabetes are big
4:20pm
problem in america. the only country fatter than us is mexico also in north america. there is makes sense there is soda sales decline. this stock doesn't have growth behind it because of cola product is in demand as a health food. people need to be really careful when they look at coke and see it entrenched brand. it is stable. doesn't mean you cannot underperform. liz: we said four, last one is caterpillar with 2.9% dividend. jeff, thank you for your picks. we'll put them up on facebook dot-com/after the bell. just to be clear he saying get them out of the portfolio before yields start to jump. thanks, jeff. >> thanks for having me. liz: jeff reed, investor place.com. ashley: big names. millionaire elon musk is minutes away from announcing a futuristic transportation system after his previous successes with tesla and space ex- we'll go live to a tech cop that could benefit from the potential space revolution.
4:21pm
liz: you do not want to miss that. could detroit rise like a phoenix from the ashes bankruptcy? you remember we said buy low? ceo of a company of a high-end watchmaker who is betting the motor city can pull off a remarkable recovery. ♪ she knows you like no one else.
4:22pm
and you woul't have it any other way. but your erectile dysfunction - you know, that could be a question of blood flow. alis tadalafil for daily use helps you be ready anytime the moment's right. you can be more confident in your abily to be ready. and the same cialis is the only daily ed tablet approved to treat ed and symptoms of bph, like needing to go frequently or urgently. tell your doctor about all your medical conditions and medications, and ask if your art is healthy enough for sexualctivity. do notake cialis if you takeni, art is healthy enough as this may cause an unsafed. do nodo not drink aohol takeni, ain excess with cialis. side effects may include headache, upset stomach, delayed backache or muscle ache. to avoid long-term injury, seek immediate medical help
4:23pm
for an erection lasting more than four hours. if you have any sudden decrease or loss in hearing or vision, or if you have any allergic reaions such as rash, hives, swelling of the lips, tongue or throat, or difficulty breathing or swallowing, stop taking cialis and get medical help right away. ask your doctor about cialis for daily use and a 30-tablet free trial. >> announcer: meet mary. she loves to shop online with her debit card and so does bill, an identity thief who stole mary's identity, took over her bank accounts and stole her hard-earned money. unfortunately, millions of americans just like you learn all it may take is a little misplaced information to wreak havoc on your life. this is identity theft and no one helps stop it better than lifelock. if mary had lifelock's bank account alerts, she would have been notified in time to help stop it.
4:24pm
lifelock has the most comprehensive identity theft protection available, guarding your social security number, your money, your credit, even the equity in your home. you even get a $1 million service guarantee. that's security no one can beat. [♪...] [click click] [♪...] ashley: it is time for a quick speed read of some of the day's other headlines. five stories, just one minute. high-end house flipping is soaring. a report by realtytrac shows flipping homes valued at one million dollars or more is up nearly 40% over the past two years. campbell's soup is in final negotiations to sell its european business to private equity firm, cbc capital
4:25pm
partners the proposed sale includes four plants and is subject to regulatory approval. u.s. gasoline prices fell eight cents over the past few weeks. that is good news. "the lundberg survey" says the price of regular gallon of natural gas is 3. off. u.s. aviation regulators want stepped up inspections and faster replacement on engine parts on small propeller planes that. is one of the most sweeping regulatory moves affecting general aviation in past 10 years. chinese cargo ship is attempting the first-ever commercial transit of the northeast passage through the arctic region as climate change melts the ice, making shipping routes possible for longer periods. it could cut a typical voyage between china and europe 15 days. [buzzer] that was the boat going through the north. liz: we're t-mine must five minutes before we et the transportation story from elon musk. speculation in the meantime as we await for that who will
4:26pm
replace fed chairman ben bernanke. that speculation is growing as president obama remains pretty coy about his decision. could there be a mystery candidate in the runing? hasn't been talked about? ashley: maybe. peter barnes joins us live from washington, d.c. with more. peter? >> ashley and liz, the president beginning this up on -- ginning this up on friday when he talked about the consideration of head nominees, potential nominees. he talked about of course larry summers his former economic visor and current vice chairman of the fed, janet yellen. he also said he was considering a couple of other candidates. sources have confirmed the president is also considering another former fed vice-chair, don kohn. who is the fourth candidate? the white house is not commenting on that. but former fed economist, roberto pelrli took a crack at it. he thinks roger ferguson, head of tiaa cref, could be a
4:27pm
candidate. princeton professor align blinder, northerly former vice-chair. the vice chairs are all over the place could be in the mix with fed governor jeremy stein. perli thinks summers is the front-runner but like yellen he would probably support continuing bernanke's easy money policies. >> the differences between summers, yellen or anybody else i think are fairly contained. i think there will be volatility but i don't think that will be long-lasting impact. >> online bookmaker paddie power.com is making odds on the race for to succeed ben bernanke right now, it has summers as the favorite with the odds one in two of his nomination. he is followed by yellen, ferguson and former treasury secretary tim geithner who said he doesn't want the job. even singer bette midler is getting in on this whole thing. she is tweeting against summers
4:28pm
saying, huh, the architect of bank deregulation which turned straight-laced banks into casones and bankers into pimps may be the next fed head, summers. ashley and he liz. liz: i love this. too funny. >> don't you love twitter? ashley: oh, yeah. liz: too much. thank you, peter. we love you. appreciate you on. thank you so much. ashley: reports say apple has set a launch date for the next generation iphone. the question will the device help apple claw back some of its declining smartphone market share? liz: plus as we said, minutes away from tesla ceo elon musk revealing plans for his jet speed hyper loop. i love the name. in just a few minutes we're bringing you all the details and we are the only business network live at the company that is going to be very much front and center here. when we made our commitment to the gulf, bp had two big goals:
4:29pm
help the gulf recover and learn from what happened so we could be a better, safer energy company. i can tell you - safety is at the heart of everything we do. we've added cutting-edge technology, like aew deepwater well cap and a state-of-the-art monitoring center, whe experts watch over all drilling activity twenty-four-seven. and we're sharing what we've learned, so we can all produce energy more safely. our commitment has never been stronger.
4:30pm
join us at projectluna.com
4:31pm
♪ liz: investors are closely watching as they stepped up the investigation into the so-called london will scandal. the thing is not new but did cost the firm more than $6 billion. authorities were worried it might hurt the bank and then shareholders. sources say that the fed may now criminally charged two former jpmorgan bankers. they're alleged role in hiding those losses. charges could be announced as soon as this week. it is understood that the trader who is nicknamed the london whale will not be the one facing
4:32pm
charges. he is said to be cooperating with authorities. the guy above him and one of his junior traders are that once were being targeted. his direct supervisor is one and the other is said to be his lower guy, a junior trader. ear watching the story. ashley: the global smart foreign -- smart phone wars set to escalate sharply. apple unveiling its next iphone on september 10th. meantime blackberry exploring strategic options. liz: as these two companies fight to stop the rise of android devices and try and get your dollars, what can they do to meet this huge challenge? joining us now to discuss all of this, research manager and managing director and senior research analyst. half -- blackberry and apple, i never thought it would be in the same corner, but the kind of are against the android and that
4:33pm
samsung. what is the issue? they may find a strategic partnership or at least they are apparently looking for one. >> here is the thing. yes, they are in the same corner for now, but come september, come october apple has been on the very different trajectory. expecting the new one to come out. the ebt that we saw in market share, that is expected. it has been nine months since the iphone five came out. a decline in market share is something else. blackberry to my very different story, a company that launched a new platform in january. it is losing some space to when those bonds as well. if i take a look at blackberry, making progress? yes. happening at a fast enough but? not yet. liz: let me ask you, tom, is it fair that in cook has been under quite a bit of pressure and
4:34pm
criticism for having a lack of products perceived in the pipeline? set a high standard. it has to be natural that there are pausing points along the way and retools everything that has been going on. what about these products?lace. what are we expecting to see in september? what about a cheaper version? is that a possibility? >> it is not unfair to criticize apple for releasing so many products at the end of calendar last year and having a bit of a dearth of announcements this fall and in calendar 2014. on the product side, the low hanging fruit, a bigger screen, could do more with payments that prior telephones, and they're is a possibility, like you alluded to, which is coming out with the ipad mini version of the iphone. so there is a lot that the
4:35pm
company could announce. liz: you have a 540 price target . we are not close to that. do you think this new phone in september could jet into that? >> the way i like to think of it is there are 60 points closer than they were a month or two ago. apple has a $60 billion buyback. but the really need innovation in the form of the next generation iphone or the next generation tablet and the potential television or watch side to drive stocks higher. i think expectations are pretty low. there is an opportunity for upside. ashley: let me bring you win. one thing i know about the blackberry and the latest blackberry ten operating system is the government loves it because it is a secure, something we don't hear very often in these days the people who can act the world. how does the blackberry move forward from year? they do start selling things off. is there a future for this company in security?
4:36pm
>> there is absolutely the future for blackberry because when it comes right down to it, and especially the example you just put out, blackberry is simply too big to fail. if you take a look at our own department of defense and other governments around the world -- liz: our own that liz macdonald reported in the last hour that the fbi is no longer using blackberry. they are switching to samsung's. some other departments are switching to apple. i agree, but it is a lumber holding true. >> it is not holding true, and there is some of that that is ruboff of blackberry for the moment. that is to say, not everyone is jumping off. when you have these other companies hanging out there, blackberry is too important for these other government parties to just put away. moving forward if you take a look at all the things in the announcement, one gentleman, the
4:37pm
way you look at that, it could be a play. but it is certainly not going to be the end of blackberry. ashley: rick folbaum. there are those who say we shall see. thank you so much. as always, thank you so much for joining us both. liz: forget about breaking bad. amc is now betting on a brand new crime drama, low winter sun, said in detroit. some businesses are also sticking with motor city, this might to bankruptcy. is it the new cool place? a little bit of an overstatement , down. one company was a big presence in detroit about why he is standing by motown. ashley: the man behind tesla is unveiling his vision for revolutionary new transportation system. real-life with the company at the forefront of this cutting edge technology. it is a fox business exclusive.
4:38pm
to not miss it. ♪ my mantra? trust your instincts to make the call. to treat my low testosterone, my doctor and i went with axiron, the only underarm low t trtment. axiron can restore t levels to normal in about 2 weeksn most men. axon is not for use in women or anyone younger than 18 or men with prostate or breast cancer. women, especially those who are or who may become pregnant and children should avoid contad as unexpected signs of puberty in children or changes in body hair or increased acne in women may occur. report these symptoms to your doctor. tell your doctor about all medical conditions and medications. serious side effects could include increased risk of prostate cancer; worsening prostate symptoms; decreased sperm count; ankle, feet or body swelling; enlarged or painful breasts; problems breathing while sleeping; and blood clots in the legs. common side effects include skin redness or irritation where applied, increased d blood cell count,
4:39pm
headache, diarrhea, vomiting, and increase in psa. ask your doctor about the only underarm low t treatment, axiron. (announcer) at scottrade, our cl make their money do more.more (ann) to help me plan my next move, i take scottrade's free, in-branch seminars... plus, their live webinars. i use daily market commentary to improve my strategy. and my local scottrade office guides my learning every step of the way. because they know i don't trade like everybody. i trade like me. i'm with scottrade. (announcer) scottrade... ranked "highest in customer loyalty for brokerage and investment companies."
4:40pm
♪ ashley: i'm ashley webster with your fox business brief. the u.s. government spent billions more than it took can. health care spending intentions for the military and elderly. profile the fiscal year which began last october, the federal government has run 607 billion in the red, but that is less than $974 billion deficit during the same ten months of the previous fiscal year. buying the aerospace communications group. the deal combines two companies. carlisle bought the unit back in 2007. general motors reportedly gradually pulling out of south korea.
4:41pm
sources say the automaker is cutting its presence in the country due to rising labor costs and union activity. that is the latest from the fox business network, giving you the power to prosper. ♪ my mother made the best toffee in the world. it's delicious. so now we've turned her toffee into business. my goal was to take an idea and make it haen. i'm janet long and i formed my toffee company through legalzoom. never really thought i would make money doing what i love. [ robert ] we created legalzoom to help people start their business and launch their dreams.
4:42pm
go to legalzoom.com today and make your business dream a reality. at legalzoom.com we put the law on your side. ♪ liz: elon musk of tesla and spacex unveiling it design plans for hyperloop, a high-speed transportation system that would allow passengers to travel from places like new york to l.a. and just 45 minutes. ashley: i'm laughing because i am thinking how great that would be. speaking exclusively. this is one of the main companies working on the revolutionary technology. liz: before you start, the news is now out. a couple of things that elon musk is saying is that this will be as 70 to up $100 billion expense, but it would be elevated because there would be no land rights issues and less
4:43pm
expensive and plane rides to the same location. >> reporter: that's right. some of those reports that we are getting a reaction exclusively from the head of et3. now, we have seen the reports now about what this hyperloop would be. et3 is creating something similar. you have met with elon musk to talk about this technology. seeing this report and looking at what he is envisioning now, what do you think? >> yes, i think it represents a big improvement in the value of trains and uses very similar principles of reducing the pressure. there is no such thing as a perfect vacuum. even space is not a perfect vacuum. we can reduce the air pressure and reduce the friction at the same time. he is talking about not quite as much vacuum level as what we have calculated to be optimal for et3, but he is talking about a vehicle that uses electric
4:44pm
turbo compressors to compress a little bit of air that is still in the tube to propel the vehicle and to levitated on a cushion of air instead of a magnetic field. >> reporter: fox business is concerned. we're standing here in front of the mock up. one of the ideas is to drive into a cube like this. what do you think about that? do you think that is something we could see in the next few years? >> what he's talking about is driving at tesla car into a hyper newcastle -- capsule. that is clearly -- the of the structure to bill that will cost much more than et3. we see a very similar thing with the small vehicle which would be a small aerodynamically shaped vehicle which would only way to worth 300 pounds. could the electrical power with a gasoline motor and could drive right into a capsule
4:45pm
and be routed to the destination for the first and last mile or first or last 20 miles. >> reporter: after meeting with elon musk several days ago and now seeing some of his plans for what he sees, do you think that they are going to be as effective and quick to implement as you had rejected? the next couple of months and implementing this between, you know, a year or a decade from now? >> it would not surprise me that they could be. >> to market with a test. my reservation in seeing that happen is that it would fragment the market into two competing systems before it even starts. so i think it is really important that one system be built to the same universal, a global standard everywhere because then and only then -- only if it is built to the same standard in every nation can it be networked together. in the early days of trains they
4:46pm
learned that lesson in the united states because everyone built according to what they thought the ideal was, and there was this mismatch. >> reporter: we have to stop there, but we will have more exclusive reaction from the founder of et3 hear from colorado. i send it back to you, liz. liz: a couple of more details. there would be -- and these are details that are apparently being revealed right now. there would be an emergency brake, that there would be 17 of these so-called potts at that time in that tube 5 miles apart. he feels, elon musk, that this would be a safe distance, and that there would be skis on the bottom of these things, made up of the same material that elon musk has used in some of his rocket ships and some of his other, you know -- ashley: greatly futuristic stuff. liz: exactly, and he said he would welcome any partnerships and other ideas, but he is a
4:47pm
true entrepreneur york. ashley: probably the ultimate entrepreneur out there. liz: amazing. more details as they become available. jo ling kent live and exclusively at et3. ashley: wish it was teleport stationed like star trek. he said, someone please invent that. if not that, then we will have to hyperloop. detroit may have filed for bankruptcy, but not everyone has given up the fight. let's -- one of those is sticking around. coming up next we will talk to the ceo of the company and why he is staying in detroit and why businesses like his are vital to the motor city recovery. to not go away. howha ♪ and man, you know how that feels. copd includes emphysema and chronic bronchitis. spiriva is a once-daily inhaled copd maintenance treatment that helps open my obstructed airways for a full 24 hours.
4:48pm
you know, spiriva helps me breathe easier. spiriva handihaler tiotropium bromide inhalation powder does not replace fast-acting inhalers for sudden symptoms. tell your doctor if you have kidney problems, glaucoma, trouble urinating, or an enlarged prostate. these may worsen with spiriva. discuss all medicines you take, even eye drops. stop taking spiriva and seek immediate medical help if your breathing suddenly worsens, your throat or tongue swells, you get hives, vision changes or eye pain, or problems passing urine. other side effects include dry mouth and constipation. nothing can reverse copd. spiriva helps me breathe better. does breathing with copd weigh you down? don't wait to ask your doctor about spiriva.
4:49pm
4:50pm
4:51pm
♪ liz: yes, to charge may have filed for bankruptcy, but not everyone has given up on the motor city. amc debuting its new series low winter sun last night. perfect timing. from then set in the bankruptcy. certainly not all manufacturers are baking -- backing away. ashley: doing business in a bankrupt city. joining me now, ceo of that rock which runs the company. thank you so much for being here.
4:52pm
that is a good place to start. you go back and forth to detroit quite a bit. what is the mood of this city right now? i cannot imagine it is very good. what is the set up ttere in particular? >> first, we wanted to be made in the usa. went to detroit and fell in love and about, what better city to make the engines that run the watch is that in the motor city. we find it to be a positive business environment. liz: tell me about what it is like to do business on a daily basis in detroit because all you hear, it is horrible. mesdames. there is no police service. cruisers are 15 years old. nothing marks. >> we have not found a different than any other city we operate in. quite honestly there is a huge art movement and a creative power there. we wanted to be part of it which is why we chose to set up camp there. ashley: what will it take to turn the city around? >> a lot of hard work. we set up shop there about two and a half years ago.
4:53pm
today we have a little over 75 full-time employees. a small difference in a big city. we feel like if everyone can -- it will be just fine. liz: how is business? >> fantastic. we just opened a store in detroit. a regional store in new york and tribeca, and business is off the chart. liz: if you were to be talking to business leaders at a meeting, what would you say to convince them to do business in detroit? what of the positives? >> the committee is very interested in moving forward. the path is the past. everyone in the business community is set on moving forward and making this a better place to be. we found everyone to be wildly helpful and really helpful in our success. ashley: what about the tax point of view. part of the problem was the taxes went up to try and pay for more services. when they left, when half the
4:54pm
town left that tax revenue went down. so from a tax point of view or incentives, what can detered offer companies that other states are now offering, such as wisconsin and indiana that a cherry picking companies as we speak from detroit? how do you stop that process? >> it is hard for me to comment because our business model was not predicated on receiving tax benefits. ashley: no incentives. >> no incentives to be in detroit other than it is a great city. liz: still making a profit. margin define. >> margins are fine. liz: everyone should know that watchmaking is all done in america. you is your basic customer and what is your basic price point? >> we range from four under and 75 to just under $800 we manufacture bicycles as well in the city of detroit that range from (195)010-2950. liz: look at this. support this company. i will tell you something, good for you.
4:55pm
thank you. his parent company. good luck. >> thank you. ashley: we were the first report the news of that elon musk traveled by elon musk called the hyperloop. it sounds incredibly interesting the details when we return. don't go away. ♪ at a dry cleaner,
4:56pm
we replaced people with a machine. what? customers didn't ke it. so why do banks do it? hello? hello?! if your bank dsn't let yo talk to a real person 24/7, you need an ally. hello? ally bank. your money needs an ally. pcentury link provides reliable yit services like multi-layered security solution to keep your information safe & secure. century link. your link with what's next.
4:57pm
4:58pm
4:59pm
>> we have more news on elon musk of tesla and his hyperloop idea. here are some of the renderings you can see of what will be what he envisions to be this pod that would be high-speed travel. these are the skis on which it would move made of the same materials used in some of his rocket ships. you can see this is a fox business exclusive look, i have been there exquisitely. getting the idea when california announced the high-speed rail and he was disappointed. he hoped it could be done better. ashley: he does. i am not a scientist, but if you can dream it, he can do it, there is always a possibility. fascinating.
5:00pm
>> resistant risk-based, immune to weather, $100 billion cost. we will see if he can do it. ashley: fantastic. thank you for joining us. we will be right back with melissa francis. >> good evening, everybody, i am in for melissa francis. here's what is "money" tonight. call it hyperloop mania. elon musk releases his designs moments ago. it's getting from l.a. to san francisco in 30 minutes as easy as he makes it sound? we will get a top expert to weigh in. and he is burning almost every bridge in sight, all word on wall street. who made money today? the company has nine lives and he is making a killing off of it.